Since its inception, the digital assets industry has struggled with friction in transaction settlement among counterparties. The rate of adoption, notional value, and the number of digital asset transactions have increased faster than current market solutions can manage and process efficiently.
Lacking at-scale banking rails for digital assets or solid regulatory frameworks, institutional clients have had to accept solutions where settlement occurs T+2 and is restricted by 9-5 weekday hours, all of which introduces risk and leaves institutions susceptible to system limitations.
Risks in financial services must be mitigated. The infrastructure that underpins finance must be robust, and the safety of assets ironclad. Though it is meant to be a force for innovation in financial services, the digital assets sector has been hindered by a clear lack of fast, secure settlement infrastructure. Until now.
Why Lynq: Solving for Settlement
Enter Lynq. Created by the industry for the industry, Lynq was advised by a consortium of leading prime brokers, market makers, exchanges, and stablecoin issuers in order to build a settlement solution that finally meets the industry’s needs. Powered by Core Partners, Arca, Tassat, and tZERO, Lynq is the first institutional-grade digital assets settlement network that enables real-time settlement and mitigates counterparty risk.
To make this solution a reality, Lynq has partnered with some of the most recognized names in digital assets. Lynq’s Launch Partners —including B2C2, Galaxy, and Wintermute — have committed to onboarding their strongest client relationships during the launch phase to facilitate critical mass, drive adoption, and accelerate network effects. Offered through a broker-dealer operated platform, user onboarding is streamlined and the platform offers scale beyond current capped deposit limits on other systems.
Lynq’s benefits for the industry are clear.
Interest
Current market conventions don’t enable clients to access the interest generated on their deposits. Lynq changes this completely. We allow clients to earn US Treasury interest while conducting transactions within Lynq’s network of trusted counterparties, which are all tZERO broker-dealer customers.
Speed
Lynq’s technology facilitates instant settlement, allowing institutions to minimize the time and resources typically allotted for multi-day trade reconciliation.
Regulated Framework
Lynq’s Core Partners are composed of several fully-regulated financial institutions, including a broker-dealer, and a qualified bank custodian for cash management. With strict adherence to regulatory standards, the partners behind Lynq aim to provide best-in-class services through a regulated framework.
We will share more about our compliance efforts in the future.
Why Now: The Industry Still Needs a Solution
Lynq offers a timely and crucial solution to regulated settlement networks by enabling clients to settle securely, earn yield on their assets, and protect their data and holdings through a SOC II technology platform.
For the past few years, the digital assets sector has grappled with disruptive events that have threatened its long-term sustainability. But that hasn’t stopped innovation or reduced the appetite for solutions that address the challenges of legacy financial systems. Digital assets are now establishing themselves as a mainstay of the global financial system, and the time is right for a settlement solution tailor-made to meet the needs of institutions.
To move the industry forward, we need to enable digital assets to flow between institutions as freely and seamlessly as fiat, and in doing so, normalize what has long been treated as exotic and niche. By launching a yield bearing, real-time settlement solution, Lynq and its consortium of participants can address outdated settlement practices and lay another brick in the foundation of a more efficient and democratized financial ecosystem.